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Editorial: Caps are welcome
They just need to be structured to meet needs

Update: A few more hysterical commentators appear to think I've been 'paid off' or something, to address that concern please read a new last paragraph.

I see that the mainstream press has picked up the "blogging" condemnation of the Time Warner experiment with tiered pricing, and usage caps. My own view on this probably counts for little but since dslreports.com is a "blog" as well perhaps I should set out my view for the record: Caps and tiered prices are overdue. The backlash against them at best misrepresents technical issues, and at worst is self-serving.

Clean fast bandwidth is not an inexhaustible resource. I want my ISP to deliver maximum speed without any perceptible congestion, and with minimal latency. I want them to invest heavily in their infrastructure to ensure they can meet the speed and latency targets morning noon and night. When an ISP engineer says that metering and caps are necessary for quality service, I believe them. Any customer of a data center understands the equation: they understand that BOTH speed and monthly usage are key factors in pricing. US ISPs, due to inheriting dial-up pricing plans (effectively included caps due to very low speeds) have been missing one pricing factor, to the detriment of the majority of users and the benefit to a minority.

The argument from good business sense:

If an ISP offers true un-metered bandwidth to any customer who pays the monthly fixed rate then sooner or later the ISP is going to degrade service to all users in order to cope with demand. Any ISP that truly does not currently meter bandwidth usage is simply lucky that their current mix of users fits within their infrastructure capability but that situation is temporary and unstable. Sooner or later as the customers party on fixed prices they will either have to increase their prices overall, degrade their service, or start to meter and deny service to some. I think it is no secret that all large broadband providers have introduced secret usage caps of one kind or another. These are undoubtedly applied arbitrarily as and when the ISP feels their infrastructure stability is challenged. I prefer to be a customer of an ISP that openly advertises that it has caps, describes what they are, and offers price plans if higher monthly usage is necessary.

The argument from security awareness:

If bandwidth is treated as unlimited, and free, there is a diminished incentive to secure wifi networks and keep ones PC uninfected. This site has been a past victim of distributed denial of service attacks from networks of PCs that are probably on un-metered or poorly metered broadband plans. When ISPs clearly identify to subscribers that bandwidth is not free then, as if by magic, wifi networks are secured with a password and - I believe - PC security awareness increases. Faced with the possibility of eating ones allowance and getting capped to an almost unusably slow speed a subscriber will pay more attention to articles on anti-virus products and protect their account against bandwidth-leaching applications such as malware and spyware.

The argument from product flexibility

In australia, which has had usage caps from the get-go, I can get ADSL2 and higher speeds than in most of the US. I think this is because offering speeds as high as technology will allow is safe when subscribers are unable to run it full bore all day and night. I would rather have a low latency 100 mbit product with usage caps or overage charges than a 4 mbit product that is unlimited. The horror of public usage caps in the US has probably hindered roll-out of the fastest tech. If pricing is allowed to correctly reflect usage then I expect some ISPs will feel more comfortable with offering faster lines.

The counter argument

The main counter argument I can discern appears to be that caps will hobble new data heavy internet applications. The usual example of such a hobbled application is downloading movies from itunes (one of the few legal sources for such large files. However I doubt that the majority of metering critics are thinking of their itunes purchases when hammering their argument).

In my opinion the recognition that gigabytes of data are not free is actually a positive for advanced applications. It is much easier to plan, price and roll out a broadband product when the architect is aware of current pricing, and not scared of hidden caps. If there is big demand for 200+ gigabyte consumer products then I expect ISPs will be motivated to respond with fairly priced packages to suit. Caps will encourage such viable "heavy" services as ISPs can offer edge caches and other partnerships that make them faster and more reliable. If itunes movie downloading is the wave of the future, but caps (pricing) stands in its way, then an "itunes2" can partner with an ISP to cache their data within the ISP and therefore offer it un-metered. If they can't do that then perhaps the product is just not yet viable.

The elephant in the room

The majority of people likely to strike the kind of caps proposed by Time Warner in their trial, or who are running afoul of existing hidden caps, are using bittorrent to get copies of movies, anime, software and TV shows for free. For popular torrents - almost exclusively pirate titles - they are not just getting close to maxing out their download speed they are also maxing out their upload speed. And they are queuing up enough content to run their connections for days on end.

Regardless of the legality of this, just one of this type of user has a "footprint" within an ISP of 100 or more regular subscribers. They are also the more tech savvy users, the most actively involved in forums, blogs and online user groups. It stands to reason that they will be the most vocal critics of "user pays". I can understand that, it is difficult to give up such a windfall. If a big bittorrent user had to buy the capacity they currently use at home, at any data center, they would pay heavily for it. Getting it for $50 a month fixed price has been a bonanza for their hard drive. A bonanza that will inevitably be curtailed.

How this will pan out

I suspect caps and tiered prices for usage will spread rapidly. ISPs (where there is competition!) should be able to compete with each other by offering more generous allowances. The small group of users who find caps or increased prices impossible to live with will migrate to whatever ISP appears to offer all-you-can-eat gigabytes, but this will only push that ISP to similar open caps.

Eventually the market for secret traffic shapers and other nastiness will go away, and that will be a welcome result of pricing bytes properly.

ISPs have an obligation as they introduce caps. How about mirroring popular URLs within their network transparently, and then not charging for access to this data, or making deals with big content producers to cache data. ISPs that innovate to ensure caps are not a problem for the vast majority of users should be rewarded by subscribers.

If the marketplace for broadband were truly competitive the change to correct pricing would be smooth but given the locks some large providers have on their audiences I expect there will be many hiccups along the way and user groups will have to continue to work online to keep the big telcos and cable companies honest.


Added to this editorial:

I've had a couple of personal messages accusing me of selling out to Comcast, or sounding 'like a press release'. Well, this site has been my full time occupation for 9 years now, and now and again someone gets so upset that they accuse the moderators, myself, or "the site" of taking money to protect the interests of an ISP. Of course this has never been the case. One of the reasons we only run lower paying google adsense network ads is so ISPs cannot squeeze us with the threat of withdrawing revenue.

I'm not in the industry merry go round of shmoozing for quotes or scoops, nobody in business has my phone number, or has the slightest leverage over me or the site. Our income here is almost exclusively google adsense, no sponsorship deals, no promotions, few and very peripheral special relationships. How many other popular sites need such little income from the industry side?

My opinion is expressed in the title of this piece: caps (and/or metered usage) is the right thing if they are structured to meet the needs (of the majority). I've no opinion whether any existing or proposed caps are suitable. I am just of the opinion that all-you-can-eat isn't working too well, isn't a sensible way to sell access.

Unfortunately the minority of subscribers who are going to have to adapt their usage to stay within caps or tiers are the most active online, the most technical, and the most likely to be following and commentating on the story as it develops. I could be like some other bloggers I've seen recently and pander exclusively to that audience for virtual diggs, but that would be the real dishonesty, the real sell out.

Most recommended from 356 comments


qworster
join:2001-11-25
Bryn Mawr, PA

4 edits

4 recommendations

qworster

Member

Are you serious?

The USA is now 17th in broadband, down from fifth a few years ago. Caps DISCOURAGE companies from upgrading! If caps are allowed, I see a repeat of the telco fiasco in this country in the '70s, where the telcos, kicking and screaming finally HAD to upgrade their crossbar central offices to ESS, because they were literally falling apart.
In Europe, they had ESS in wide usage 20 years before we did here. Are you aware that Europe had PCM links and ISDN over 15 years before the USA did? France had telephones with screens and keyboards back in the 1970s. Yet in my old town (Rehoboth, MA) we didn't even have touch tone dialing until after 1990! Now YOU advocate a similar paradigm with broadband???!!! You truly MUST be kidding here!

Caps are counter-productive-especially in these days of streaming video. In essence, you want ALL online video to be pay per view! I'm sure that Comcast, Time Warner, Verizon and AT&T wholeheartedly agree with you-because caps insure THEIR continued monopoly as video content providers!

Caps will also stifle the growth of online radio, online programs, online gaming, you tube and other online services. Caps will stifle the adoption of alternative OSes like Linux. Caps can even stifle VOIP-another thing that the telcos and cable industries would LOVE!-after all, THEY want to be your phone company! SCREW Vonage! After all, all they did was INVENT the business! Let's steal it from them and then force them out of business! Great ethics you subscribe to, DSLR!

Look, broadband is a monopoly in this country. If you're lucky in a big city, you can get TWO providers-the cable company or the telco. In other areas, you're lucky to have ONE! Now you want those monopolies to have the ability to stifle competition against THEM???!!! You want THEM to have a 100% monopoly on content???!!!

Right now, online radio and video is in its infancy. Its growth has been stifled by the RIAA and MPAA. Now YOU advocate essentially snuffing it out before it even gets popular.

You are a tool for the incumbents and the enemy of the newcomer.

I PAY for my Internet, and I WANT my Internet unadultered AND uncapped!!
Dampier
Phillip M Dampier
join:2003-03-23
Rochester, NY

1 edit

4 recommendations

Dampier

Member

Facts #2: He Who Controls the Pipe Controls the Content

The author who suggests that broadband caps are somehow a "welcome development" joins the crowd of the uninformed about what really drives this kind of proposal. If one steps back and looks at the industry narrative and positioning on this issue, both in Washington and in their statements to the press for public consumption, it's not too hard for anyone politically aware to see the public relations lobby hard at work to position the cable industry's broadband product as under imminent threat of being brought to its knees, while the real motivation is to maximize profitability, cut costs, and maximize shareholder value.

Others who suspect there is a connection between the net neutrality debate and the "bandwidth shortage" debate have it exactly right. The imposition of usage caps goes hand in hand with the plans of content providers to attempt to control the delivery platform, not through enforcement but rather by using dis-incentives like increased cost.

And the proof is in the pudding: Every suggested bandwidth cap will exempt content downloaded or accessed from the cable operator's own content/website portal. So if you own the content, or have an agreement with the cable company to deliver that product in a controlled environment, subscribers need not fear exceeding any bandwidth cap when dealing with their service provider's content. That easily increases the value of such exempt content, and makes BitTorrent and other networks in the copyright wilderness untenable. A win-win for corporate-controlled entertainment and distribution, a loss for consumers who will face precisely the same costs they do today with a dramatically less flexible service, whether it is used entirely legally or not.

Competitors and independent producers now have the disadvantage of attempting to compete on a playing field so unbalanced as to make it impossible to realistically use the Internet as a content delivery platform. It simply becomes too costly, both to develop a business plan challenged by the reality of a tightly capped Internet, and for potential viewers who now have to weight whether your content is worth using up your monthly allotment, when you could always visit the cable company's own portal and watch their content for free.

The vast majority of those quietly and informally capped by cable companies often far exceed even the generous caps being suggested by Comcast, and considering the massive profitability of the broadband cable industry, nobody is really being bled by the people they are informally regulating. And for a company like Time Warner to seriously suggest caps more common to mobile telephony, all at their existing rates, makes any effort to defend such profit-taking as naive at best, complicit at worst.

Make no mistake - there is no bandwidth crisis in the United States. This entire narrative is a product of a public relations effort to create the excuse necessary to justify massive profit-taking, underinvestment in network infrastructure allowing this country to fall even further behind, and restore as much corporate control over content as possible. This returns us to the days of a media financial gatekeeper which allowed only the biggest players to have open access to the content delivery platforms.

It is far easier to put the brakes on a company attempting to implement such draconian caps with vocal outrage BEFORE they are implemented. Allowing apologists to go unchallenged, or falling into the marketing trap of pitting customers against one another, is a fundamental mistake which will guarantee Americans pay the same or more for a service that will be purposefully restricted and controlled, not because of a bandwidth crisis, but for higher profits, copyright enforcement, and content control.

Control the medium, control the message.

ninjatutle
Premium
join:2006-01-02
San Ramon, CA

2 recommendations

ninjatutle

Member

No

Keep it unlimited and crack down on the illegal torrent stuff.

NOCMan
MadMacHatter
Premium Member
join:2004-09-30
Colorado Springs, CO

2 recommendations

NOCMan

Premium Member

Wrong WRONG Wrong

Youtube, Facebook, Twitter, Last.Fm etc etc etc are all companies that grew in the US. When was the last time you heard of a internet company as big as them forming in a country with bandwidth caps. That's right, they do not exist.

ISP's are basically the Exxons of the internet. They are in complete control. Instead of employing "FREE" QOS included with all their hardware they are choosing to make MORE money off people who use the service. The VALUE goes DOWN when you put caps on a unlimited service.

Frankly believing that competition will allow caps to be generous is just putting your head in the sand Justin. I've written to several media companies who are dependent on a unlimited internet. That's why they are in trials in the US. A limited customer will be reluctant to try a new service that eats up their allotment.

1.50 per gb is robbery when it's pennies on the dollar to provide a gb to a user. If this catches on I'm going to have to look into stock because their profits will soar.

Unfortuately it will end up being a economic disaster.

This is nothing more than telco/cable charging for access. Instead of charging Google, they figured out they can charge people without their own lobby; regular users.

FifthE1ement
Tech Nut
join:2005-03-16
Fort Lauderdale, FL

1 edit

2 recommendations

FifthE1ement

Member

Read this...

Mike Masnick at techdirt.com tells it best:

"If the CTIA exec gets his way and convinces providers to move more to metered bandwidth, then his belief that the internet has plateaued may become a self-fulfilling prophecy, as it'll undoubtedly slow the pace of innovation online. Imagine, for example, that metered bandwidth was common when YouTube first hit the scene? It would absolutely have slowed adoption, because video uses quite a bit of bandwidth and people would have been a lot less likely to test it out. In fact, the same could be said for any kind of non-text multimedia. Podcasts? Why waste that bandwidth? Streaming radio? iTunes would also be more expensive, as every download doesn't just cost $0.99, but your metered bandwidth charge. If you look at history of innovative services, you'll see they tend to move more and more towards flat rate offerings, as it encourages usage and encourages innovation. Phone service and mobile phone service have both trended in exactly this direction -- and in both cases it's because it's opened up a much larger overall market, even if it means less per customer. So, why are we suddenly trying to go the other way with broadband?"

»www.techdirt.com/article ··· 49.shtml

Imagine if users had to selectively choose which online services were best suited to their needs before ever visiting those sites for fear of overages? Can you remember the days of metered online dial-up access where you would login to start an email, disconnect, and then reconnect to send to save time and bandwidth? I imagine if this was initiated instantly around the world internet innovation as we know it would cease to exist and sites/services such as facebook, youtube, and even itunes would cease to grow. I'm not saying everything would die and the world would end but adoption rates and other significant innovation spurs would be curved. This is not good for the American and world people even though many might think so. This is just another excuse so the cable companies do not have to upgrade their deteriorating infrastructures.

Regards,

FifthE1ement

Vchat20
Landing is the REAL challenge
Premium Member
join:2003-09-16
Columbus, OH

2 recommendations

Vchat20

Premium Member

Makes sense...

I've never personally been fond of caps myself and it's probably partly due to the whole ex-webmaster/satellite FAP scenario's at the most.

But reading over this post I do have to agree with you Justin. And I have always seen the point where bandwidth costs are more than what are brought in from each customer. The equivalent of a DS3 or thereabouts in a residential scenario is hardly gonna cover the cost of the final backbone link to the larger internet when it comes down to raw finances.

The only way ISP's have been able to manage thus far is via overselling their connections with the belief that 85%+ of the customer base is only going to use a fraction of the connection. And with the increase in usage of high bandwidth applications by the average end-user like DirecTV VOD, AppleTV, Tivo's own VOD offerings, and many other LEGAL sources of bandwidth consumption, it is becoming much harder to oversell those connections without tons of congestion. And you really can't blame the ISP's for this. If overselling was not possible, we'd probably be back in the days of 256k/128k for $39.99/mo or thereabouts.

I feel that as long as the ISP's gave users CLEAR tools to check their usage and gave periodic warnings of reaching the caps (One good idea: With the likes of cable ISP's like Time Warner and settop functionality like Caller ID on tv, why not just go that route as a viable cap warning system?), it would hardly be much of a problem. Many people are already used to this type of deal with Wireless phone plans, Long distance, etc..

It's either that or do exactly like some web hosting companies do: Offer either a set 'burstable' transfer rate with a cap or a lowered maximum transfer with no cap. I'm sure the latter would also be viable as a tier. It's just end users that would have to buck up with the fact that it's gonna cost them in some fashion.

Also, in response to a few other users who have posted here: I do not think it's right to outright try and block illegal file sharing. In fact, it is impossible to JUST ban the illegal filesharing by the very nature of the beast. It is NOT going to happen. At least not without blocking legitimate applications along with it. And by the time that was set up, you have new methods that bypass the ban.

karlmarx
join:2006-09-18
Moscow, ID

2 recommendations

karlmarx

Member

But the market ISN'T competetive

Lets face it, for the VAST majority of people, you have ONE choice of a broadband provider, and if you're lucky, you have 2 (Cable or DSL). That means that they will charge as much as they can, while providing as little service as they can.

When you DO get to a competitive environment (i.e. Fios, Cable, DSL, etc), you see what they do. They jack up the speeds, and lower the prices. Look at the areas where comcast is competing with FIOS. Sure, both of them raise prices (collusion), but neither of them would think of imposing CAPS.

As I've stated MANY times before, the internet is NOT LIKE ELECTRICITY. There is no 'unit cost' to create a byte of data. If you purchase a Fixed Rate T-3, you are charged the same amount, wether you use 1mb/sec, or 45mb/sec.

Data Transmissions are a TRANSIENT product. A circuit is capable of carrying X number of bytes. If you use the circuit at 50% of X, you have wasted 50%. There is no increased cost for providing those bytes. The COST is the CAPITAL COST, to provide X bytes in the first place. Once you HAVE EXPENDED the money to provide those capabilities, the UNIT COST is ZERO.

Electricity, on the other hand, has a UNIT cost to CREATE it. It takes money to make electricity. Look at Solar Power. You pay a lot of money up front to put on solar panels, and apart from maintenance, there IS NO COST to generate electricity. ISP's are exactly like solar plants. Lots of money to create, but NO COST (baring maintenance) to generate the power.

The problem of course, is that they SELL more than they can provide. If comcast limited everyone to 2MB/sec, then guess what, there would be no discussion of caps, because their infrastructure could handle it. The marketing department of comcast is out of touch with the technical side, becuase marketing is selling 20mb/sec, when the technical can only provide 2mb/sec.

The solution. SELL what you are technically capable of PROVIDING. I sure as hell would be pissed if honda sold me a car that could only use 'Mobil' gasoline. I paid for the car to move me from point a to point b. They have NO RIGHT to tell me HOW I have to use the car (i.e. brand of gas). The ISP'S want to sell you the car, and tell you what kind of gas you can use.

BillRoland
Premium Member
join:2001-01-21
Ocala, FL

2 recommendations

BillRoland

Premium Member

Interesting

I never thought I would see this article from DSLR. I will add a couple of thoughts.

1. Caps and Security have nothing to do with each other, and believing caps are going to lead to a mass public awakening that results in Wi-Fi hardening and decreased DDoS is either wishful thinking to the extreme, or pure naivety. Whatever it is, its an absolutely absurd notion. We have posted speed limit signs too but people don't obey those.

2. I think you're underestimating the power of flat rate. People love all you can eat specials. Look at the recent mad dash of cell phone "all you can eat for $xx a month" plans. Metered usage is only going to work if everybody agrees to play by the same rules. If Comcast and Time Warner go to metered plans, but AT&T and Verizon do not, then Comcast and Time Warner are going to get taken to school, especially by the marketing departments of the telcos. Not only that, you can end up with somebody like ClearWire busting onto the scene and offering unmetered access as a product differentiator.

I should add I'm not necessarily against the concept of caps. I am, however, doubtful any operator is going to have the needs and best interests of the customers at heart when they are designing any caps.